TMI Blog1998 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Gheru Lal Bal Chand [1978] 111 ITR 134, was not a mistake apparent from record within the Act and that the Income-tax Officer is not justified in proceeding under section 154 to disallow the deduction made in respect of these expenses?" The assessee is a registered firm. The dispute relates to the assessment year 1975-76. During the relevant year the assessee claimed deduction of Rs. 12,692 on the ground that it had incurred Rasoi expenses during the accounting year. The Income-tax Officer disallowed a sum of Rs. 1,000 from the same while making an assessment under section 143(3) of the Income-tax Act. However, subsequently, the Income-tax Officer realised that an error had occurred in allowing the assessee Rasoi expenses amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-tax (Appeals). The appeal was dismissed. The assessee filed a further appeal before the Income-tax Appellate Tribunal. It came to the conclusion that the issue regarding allowability or otherwise of expenditure incurred over the supply of food and refreshments by a businessman to his constituents is no longer an open issue as far as the State of Punjab is concerned and all authorities subject to the jurisdiction of the Punjab and Haryana High Court are bound by the rule of law enunciated in Gheru Lal Bal Chand's case [1978] 111 ITR 134 (P H). The Tribunal, however, went on to state that there is a controversy about the issue and it cannot shut its eyes to the decisions of the other High Courts, for the matter of deciding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng meals to its constituents. This claim was allowed by the Tribunal. On a reference at the instance of the Revenue, this court came to the conclusion that according to the strict dictionary meaning the kitchen expenses incurred by the assessee do not fall within the meaning of the words "entertainment expenditure" but the expenses incurred are certainly "in the nature of entertainment expenditure". The view of this court is thus clear that Rasoi expenses are not admissible for claiming deduction. The opinion of this court, as also noticed by the Appellate Tribunal is binding on the authorities under the Income-tax Act functioning within the jurisdiction of the High Court. True that the Bombay High Court and the Gujarat High Court had taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Officer was of the opinion that such allowance and deduction were wrongly allowed to the assessee and it was a mistake apparent from the record. He thus after issuing notice under section 154 withdrew the allowance and the deduction. The Tribunal in second appeal held that the mistake was not apparent from the record as the dispute involved was debatable. It was in this context held that in view of the decision of the Supreme Court, a cold storage cannot come within the meaning of "industrial undertaking". The High Court, thus, came to the conclusion that the opinion of the Income-tax Officer was right in rectifying the assessment and holding that the cold storage is not an industrial undertaking and, as such, is not entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication of the assessee, relying upon a decision of the Calcutta High Court and held that the question whether the amount of secured loans obtained by the assessee from the Punjab Financial Corporation was deductible or not while computing the capital employed as per the provisions of rule 19 of the Income-tax Rules, was a debatable issue and, therefore, the provisions of section 154 of the Act were not applicable to the facts of the case. The Income-tax Officer thus had no jurisdiction to act under section 154 of the Act, there being no mistake apparent from the record. A reading of the above judgment clearly gives an indication that if there is a settled view of the court on a point and which view had not been taken note of by the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Bombay High Court and the Gujarat High Court have taken a view contrary to the one taken by the Punjab and Haryana High Court, but in the presence of a definite opinion of this court, the same shall prevail and is binding on the functionaries working within the territorial jurisdiction of this court. The authorities by reference to the opinion of another High Court cannot say that the point is debatable and thus is not a mistake apparent on the face of the record. The view of this court as already noticed by the Tribunal was definite and the question of a doubt being there did not arise if the assessment order had been passed in the first instance. The assessing authority could not have taken a view contrary to the one taken in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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